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U N I T E D N A T I O N S

General Assembly
Distr.
UNRESTRICTED

A/532
10 April 1948

ORIGINAL: ENGLISH
REPORT OF THE
UNITED NATIONS PALESTINE COMMISSION
TO THE SECOND SPECIAL SESSION OF THE GENERAL ASSEMBLY


The United Nations Palestine Commission herewith submits to the second special session of the General Assembly a report on its activities to date in pursuance of the resolution of the General Assembly on the Future Government of Palestine adopted on 29 November 1947 (resolution 181 (II)).

CONTENTS
I.INTRODUCTION
II.ORGANIZATION AND PROCEDURE OF THE COMMISSION
A.
Establishment and meeting of the Commission
B.
Tasks of the Commission
C.
Invitations to the Mandatory Power, the Arab Higher Committee and the Jewish Agency for Palestine
D.
Reports of the Commission to the Security Council
III.MAJOR DIFFICULTIES CONFRONTING THE COMMISSION
A.
Position of the Mandatory Power
1.
Implementation of the Resolution
2.
Progressive transfer of authority
3.
Date for Commission's arrival in Palestine
4.
Other provisions of the Plan
5.
Evacuation of seaport and hinterland
6.
Implications for the Commission of the position of the Mandatory Power
B.
Arab resistance
C.
Strife in Palestine; deterioration in administration, law and other
IV.THE WORK OF THE COMMISSION - PART ONE: SECURITY AND ADMINISTRATIVE PROBLEMS
A.
Procedure
B.
Advance Party
C.
The Security problem
D.
Administrative problems
1.
Provisional Councils of Government
2.
Armed militias
3.
Police Forces
4.
Administrative personnel of the Palestine Government
5.
Postal administration
6.
Medical services
7.
Public information services and facilities
8.
Prisoners and detainees, and internees in Cyprus
9.
Municipalities and Local Councils
10.
Requisition property
12.
Palestine Museum in Jerusalem
V.THE WORK OF THE COMMISSION - PART TWO: ECONOMIC, FINANCIAL AND FISCAL PROBLEMS
A.Steps toward the Economic Union
B.Palestine Government assets
C.General continuity of essential economic services
D.Food supply
E.Sterling balances and foreign exchange problem
F.The Palestine Currency Board
G.Fiscal problems
H.Transport and communications
VI.CONCLUSIONS
A.Review of the facts which have prevented the implementation of the Assembly's resolution
(a) Security
(b) Administrative
(c) Economic and financial


INTRODUCTION

A. The resolution of the General Assembly on the future government of Palestine, approved on 29 November 1947, which created the United Nations Palestine Commission and charged it with the task of implementing the measures recommended by the General Assembly in its Plan of Partition with Economic Union, provides that the Commission should act under the guidance of the Security Council and should receive from that Council such instructions as the Council might consider necessary to issue. The resolution also requests that:

"(a) The Security Council take the necessary measures as provided for in the Plan for its implementation;
"(b) The Security Council consider if circumstances during the transitional period require such consideration, whether the situation in Palestine constitutes a threat to the peace. If it decides that such a threat exists, and in order to maintain international peace and security, the Security Council should supplement the authorization of the General Assembly by taking measures, under Articles 39 and 41 of the charter, to empower the United Nations Commission, as provided in this resolution, to exercise in Palestine the functions which are assigned to it by this resolution;
"(c) The Security Council determine as a threat to the peace, branch of the peace or act of aggression, in accordance with Article 39 of the Charter, any attempt to alter by force the settlement envisaged by this resolution;"

B. After studying all the information available to it, the commission reached the inescapable conclusion that, in view of the situation which had developed in Palestine, it was necessary to refer to the Security Council the problem of providing that armed assistance which alone would enable the Commission to discharge its responsibilities on the termination of the Mandate. For the purpose the Commission presented to the Security Council its first Special Report on the Problem of Security (S/676).

C. The Security Council did not provide armed assistance for the Commission, nor did it give to the Commission guidance or instructions, as envisaged in the resolution of the Assembly. The Security Council did approve two resolutions, one calling for steps to be taken to arrange a truce between the conflicting parties in Palestine, and the other requesting the convocation of a special session of the General Assembly to consider further the question of the future government of Palestine.

D. Confronted with the situation created by this action of the Security Council, the Commission, in the absence of any instructions from the Council, had to decide for itself its future course. Recognizing its obligation to the Assembly and with a deep sense of its duty and responsibilities, the Commission on 2 April adopted the following resolution defining its position:

“THE UNITED NATIONS PALESTINE COMMISSION,"

E. In pursuance of the Assembly’s resolution, the Commission has kept the Security Council informed of its work, its needs, and the major obstacles it has encountered in its efforts to implement the Plan. In so doing the Commission has presented to the Security Council two Monthly Progress Reports (S/663 and S/695), and one Special Report on the Problem of Security in Palestine (S/676).

F. These reports describe the difficulties which have confronted the Commission and which have prevented it from carrying on its work in conformity with the recommendations of the General Assembly.

The general policy of the Mandatory Power has been not to take any measure which might be construed as involving it in the implementation of the Assembly’s resolution. It did not accept the provision of the resolution calling for a progressive transfer of authority to the Commission; insisted on retaining undivided control of Palestine until the termination of the Mandate; and informed the Commission that it “would not regard favourably” the arrival of the Commission in Palestine earlier than a fortnight before the date of termination of the Mandate.

More important still, Arab elements, both inside and outside of Palestine, have exerted organized, intensive effort toward defeating the purposes of the resolution of the General Assembly. To this end, threats, acts of violence and infiltration of organized, armed, uniformed Arab bands into Palestinian territory have been employed. As early as 16 February, the Commission, in its first Special Report to the Security Council, stated that “powerful Arab interests, both inside and outside Palestine, are defying the resolution of the General Assembly and are engaged in a deliberate effort to alter by force the settlement envisaged therein”.

The organized efforts of Arab elements to prevent the partition of Palestine; the determined efforts to Jews to ensure the establishment of the Jewish State as envisaged by the resolution; and the fact that the Mandatory Power, engaged in the liquidation of its administration and the evacuation of its troops, has found it impossible fully to contain the conflict, have led to virtual civil war in Palestine; to a steady deterioration in administration and security in the territory; and to the imminence of widespread chaos, starvation, strife and bloodshed on a scale hitherto unknown there.

G. Without reference to the ultimate decision of the General Assembly on the future government of Palestine, there are a number of vital matters which, in the interest of the peoples of Palestine, should be urgently dealt with before 15 May, when the Mandate is terminated. Among these are such problems as ensuring future food supply, continuity in communications and transport services, health administration, and the disposition of Palestinian assets and liabilities, as described in Chapter VI of this report. In the view of the Commission, the dominant fact is, however, that in the absence of forces adequate to restore and maintain law and order in Palestine following the termination of the Mandate, there will be administrative chaos, starvation, widespread strive, violence and bloodshed in Palestine.
II. ORGANIZATION AND PROCEDURE OF THE COMMISSION

A. ESTABLISHMENT AND MEETINGS OF THE COMMISSION

1. The resolution on the future government of Palestine, adopted by the General Assembly on 29 November 1947, provides for the establishment of a Commission charged with the task of implementing the Plan of Partition with Economic Union. The following Member States, having been elected to the Commission by the General Assembly, designated their representatives as follows:



2. The Commission assembled for its first meeting at Lake Success on 9 January 1948. It elected the following officers:

3. The Commission has held sixty-five meetings between 9 January and 10 April 1948.

4. Since the Commission’s work, in the nature of the case, has been primarily executive rather than deliberative, involving extensive negotiations and confidential information, all but the first of its meeting have been held in private. Verbal briefings have been given to the press after each meeting, and the Commission itself has held three press conferences.

5. The Commission adopted provisional rules of procedure in the course of its fifth and sixth meetings on 14 January 1948, but has necessarily emphasized informality in the conduct of its business.

B. TASKS OF THE COMMISSION

1. The Commission’s interpretation of its role has been that, in conformity with the recommendations of the General Assembly, it is to take all steps consistent with the authority given it by the resolution of the Assembly to put into effect in Palestine the Plan of Partition with Economic Union. From the beginning of its work the Commission was aware of the magnitude of the responsibilities which had been entrusted to it by the Assembly.

2. Among the major tasks confronting the Commission in giving effect to the recommendations of the Assembly are the following:

The Commission has concentrated its attention on these major tasks and the numerous detailed problems relating to them.

C. INVITATION TO THE MANDATORY POWER, THE ARAB HIGHER COMMITTEE AND THE JEWISH AGENCY FOR PALESTINE

1. At the outset of its work the Commission recognized the importance to the implementation of the Plan of the co-operation of the Mandatory Power and the Arab and Jewish communities. The General Assembly had accepted the Arab Higher Committee and the Jewish Agency for Palestine as qualified spokesmen for their respective communities. While bearing in mind that it would need to consult other organization, particularly with a view to selecting the two Provisional Councils of Government, the Commission decided at its first meeting to request the Secretary-General to extend the Arab Higher Committee and the Jewish Agency the same invitation which was being extended to the Mandatory Power: “to designate such representatives as it may determine, who shall be available to the Commission for such authoritative information and other assistance as the Commission may require in the discharge of its functions...”

2. The invitation was accepted by the Mandatory Power, who designated Sir Alexander Cadogan as its representative, and by the Jewish Agency, who designated Mr. Moshe Shertok. The Arab Higher Committee informed the Secretary-General by telegram on 19 January that it was unable to accept the invitation extended to it, and that it was “determined to persist in rejection partition and in refusal recognize UNO resolution this respect and anything deriving therefrom”.

3. The Commission realized the implications of the attitude taken by the Arab Higher Committee. The Plan of the General Assembly, however, had foreseen that it might not be possible to select or, if selected, to have functioning, a Provisional Council for one or other of the States by 1 April, and had provided that the matter was to be reported to the Security Council for such action with respect to that State as the Security Council might deem proper. The Commission, despite the refusal of the Arab Higher Committee to consult, accordingly decided to proceed with its work and undertook consultations with the Mandatory Power and the Jewish Agency.

D. REPORTS OF THE COMMISSION TO THE SECURITY COUNCIL

1. The Plan (Part I, B, 14) provides that “the Commission shall be guided in its activities by the recommendations of the General Assembly and by such instructions as the Security Council may consider necessary to issue... The Commission shall render periodic monthly progress reports, or more frequently if desirable, to the Security Council”.

2. The Commission has rendered to the Security Council two Monthly Progress Reports (S/663 and S/695, dated 29 January and 12 March 1948, respectively). It has also found it necessary to present to the Security Council a Special Report on the Problem of Security in Palestine (S/676, dated 16 February 1948), which is dealt with more extensively in Section IV, C of this report.
III. MAJOR DIFFICULTIES CONFRONTING THE COMMISSION

A. POSITION OF THE MANDATORY POWER

1. Implementation of the resolution

The attitude of the Mandatory Power regarding the implementation of the resolution of the General Assembly had been indicated during the last regular session of the General Assembly. Sir Alexander Cadogan stated before the Commission at its meeting of 14 January 1948, that his Government

This attitude of the Mandatory Power was bound to limit its co-operation with the Commission. The Mandatory Power has recognized the Commission as the sole authority which, after 15 May 1948, will be the Government of Palestine and to which it will be open on that date “to assume full responsibility for government in the whole of Palestine, subject only to the over-riding military jurisdiction of the General Officer Commanding in areas to be specified by him.” This recognition, however, does not extend to the application of certain specific provisions of the Plan, which the Mandatory Power has not considered binding upon itself.

2. Progressive transfer of authority

Although the Plan (Part I, B, 2) provided that “the Mandatory Power shall to the fullest possible extent co-ordinate its plans for withdrawal with the plans of the Commission to take over and administer areas which have been evacuated”, the Commission was informed:

(a) That the Mandatory Power had decided to lay down the Mandate and terminate the Mandatory Administration on 15 May 1948. There would be no transfer of any authority to the Commission before that date. While the progressive withdrawal of British troops was to be well under way by 15 May, the Mandatory Power would retain undivided control over the whole of Palestine until that date, when they would relinquish responsibility for the government as a whole and not piecemeal. The whole of Palestine would then be “at the disposal of the Commission subject to overriding control by the General Officer Commanding in those areas in which he is in military occupation, which will be progressively reduced.”

(b) That the withdrawal of British forces would be completed by 1 August 1948 (the time-limit fixed by the General Assembly), and that the plans of gradual withdrawal had been fixed.

3. Date for Commission’s arrival in Palestine

While the “whole o Palestine [would] be at the disposal of the Commission after 15 May 1948, subject to the reservation mentioned above, the Commission was informed that it was not the intention of the Mandatory Power to facilitate in any way the implementation of the resolution of the General Assembly, other than by furnishing information and advice. Thus, the Commission was advised that “His Majesty’s Government would not regard favourably any proposal by the Commission to proceed to Palestine earlier than two weeks before the date of the termination of the Mandate”. This position was reaffirmed on several occasions, although the Commission, on 3 February 1948, had formally communicated to the Mandatory Power its dissatisfaction with this policy and had pointed out that this limitation on its arrival in Palestine would make it impossible for the Commission to discharge the responsibilities entrusted to it by the General Assembly.

4. Other provisions of the Plan

The Commission was advised that the Mandatory Power “cannot facilitate the delimitation of frontiers on the ground” prior to the termination of the Mandate; that the Provisional Councils of Government which the Commission might select “could not exercise any authority prior to the date of the termination of the Mandate”; that, despite the necessity for making advance preparations in order to have the armed militias in effective operation, the Mandatory Power “cannot allow the formation of such forces prior to the termination of the Mandate”; that, in spite of the Commission’s desire to ensure continuity in the administrative machinery of Palestine, “there can be no question of the outgoing authority handing over to the Commission their former servants [not only British, but also Palestinian] under any obligation, by the terms of their employment, to continue service with the Commission....British personnel cannot be seconded to the staff of the United Nations Commission for service in Palestine because His Majesty’s Government in the United Kingdom has frequently made it clear that they are unable to provide any part of the machinery of implementation.....”

5. Evacuation of seaport and hinterland

The Commission had enquired of the Mandatory Power as to its plans regarding the recommendation in Part I, A, 2 of the Assembly’s resolution regarding the evacuation by 1 February of a seaport and hinterland to provide facilities for a substantial Jewish immigration.

In its reply, the Mandatory Power informed the Commission that it “cannot fulfil the Assembly’s recommendation, first, because its fulfilment would be contrary to their conclusion that it is impossible for them to lay down the Mandate piecemeal; secondly, because the opening of a Jewish seaport to the introduction of unlimited numbers of Jewish immigrants and possibly to the unregulated importation of arms, would undoubtedly produce a most serious deterioration of the security situation in Palestine with incalculable effects upon the maintenance of the Mandatory Administration, the preparations for the withdrawal of the British element in the administrative machine, and the evacuation of British troops and stores which is already proceeding”.

6. Implications for the Commission of the position of the Mandatory Power

The Commission could not change this position of the United Kingdom. It has had to accommodate itself to it and to negotiate with a view to adapting its plans for carrying on in Palestine after 15 May to the plans of the United Kingdom Government to abandon its responsibilities as a whole, while affording the successor authority no assistance which, in their view, would constitute implementation of the Assembly’s resolution.

The Palestine Administration has accordingly been unable to take any steps or to pursue any measures which would be designed to prepare the ground for the Plan. This has been particularly serious in view of the inability of the Commission itself to be in Palestine. The refusal of the Mandatory Power to co-operate in implementing the Plan, its rejection of any progressive transfer of authority, and the inability of the Commission to be in Palestine, constitute a serious jeopardy to the discharge of the Commission’s responsibilities.

B. ARAB RESISTANCE

The Arab Higher Committee has continued to oppose the resolution of the Assembly and has refused to co-operate with the Commission. Opposition to the resolution of 29 November 1947 has taken the form of armed resistance. The extensiveness of the frontiers of Palestine with the neighboring Arab States and the apparent ease with which they may be crossed, even when British troops are still in the country, have facilitated such resistance by making available increasing numbers of arms and men. This factor has greatly added to the difficulty of implementing the resolution of the Assembly. It is not only the Arab State, envisaged in the resolution, which cannot now be constituted according to the Plan, but the establishment of the Jewish State and of the International Regime for the City of Jerusalem are also obstructed by the Arab resistance.

Arab opposition to the Plan of the Assembly has taken the form of organized efforts by strong Arab elements, both inside and outside of Palestine, to prevent its implementation and to thwart its objectives by threats and acts of violence, including repeated armed incursions into Palestinian territory.

The Commission had had to report to the Security Council that “powerful Arab interests, both inside and outside Palestine, are defying the resolution of the General Assembly and are engaged in a deliberate effort to alter by force the settlement envisaged therein”.

C. STRIFE IN PALESTINE; DETERIORATION IN ADMINISTRATION, LAW AND ORDER

As a result of Arab armed opposition to the resolution of the General Assembly, a counter or preventive measures taken by the organized Jewish community, and the continued activity of Jewish extremist elements, Palestine is now a battlefield. Unless a truce is negotiated and observed, the ensuing weeks will witness an intensification of the struggle.

Mounting disorder, resulting from the internal conflict, is accompanied and facilitated by steady deterioration in administration, which is a by-product of the process of civil and military withdrawal being pursued by the Mandatory Power. The Mandatory Power, insisting on undivided control until 15 May, states that “civil administration will be maintained throughout Palestine as far as the security situation permits”. As early as 14 January 1948, Sir Alexander Cadogan, reviewing the situation, stated that, since the first week in December 1947, the situation had deteriorated rapidly. Violent conflict between the two communities had been intensified; courts and essential government services had been either unable to operate or were seriously crippled; there was but one month’s supply of certain types of fuel oil in the country; there was general insecurity; communications were obstructed; the collection of public revenue was expected to drop sharply; and “generally speaking, there has been a very severe diminution in the functions and authority of Civil Government.....”

Such was the situation which confronted the Commission at the very beginning of its work. That situation was bound to worsen as the date announced for the termination of the Mandate approached. The Commission has exerted every effort to direct attention to the perilous situation in Palestine; to emphasize the urgency of the time factor; and to give warning of the heavy responsibilities which would be incurred if the situation were allowed to deteriorate still further. In its reports to the Security Council the Commission had indicated the remedies which were necessary and the preparations which must be made urgently with a view to preventing a complete collapse of law and order on the date of the termination of the Mandate.

IV. THE WORK OF THE COMMISSION
PART ONE: SECURITY AND ADMINISTRATIVE PROBLEMS

A. PROCEDURE

The Commission, unable to proceed to Palestine before 1 May, even for any preparatory work, obtained from the Mandatory Power as much information as possible through a series of questions and answers and through informal conversations.

The procedure of informal consultations was also followed with the Jewish Agency.

B. ADVANCE PARTY

In response to a suggestion by the Mandatory Power that, although the Commission itself could not come to Palestine at the time, it might wish to send a few members of its staff “for the purpose of finding accommodation and making arrangements for necessary facilities” with the Palestine Government, the Commission, after negotiations on the matter, decided to send an advance party to Palestine composed of six members of the Secretariat for purposes of observation and exploratory discussions. The Advance Party arrived in Palestine early in March. Their reports have helped the Commission to appreciate the development of the situation in Palestine during the last few weeks. They have also been of great assistance in the negotiations which have been pursued with the Mandatory Power. The reports have stressed that in fact, though on a de facto basis and without reference to the Plan of Partition, partition has already advanced very far in Palestine, as a result of the decentralization of authority and the division of the population into two distinct communities.

C. THE SECURITY PROBLEM

1. Security is the main problem of Palestine today. In its first Monthly Report to the Security Council dated 29 January 1948, (S/663), the Commission indicated that the information given by the Mandatory Power and the Jewish Agency for Palestine coincide in substance on the following points:

(a) The general insecurity in Palestine;
(b) The steady decline of the security situation;

(c) The increasing deterioration in the civil administration.

The Commission had to envisage the possibility of a collapse of security and administrative services on the termination of the Mandate unless adequate means were made available to the Commission for the exercise of its authority. It was devoting most serious attention to the various aspects of the security problem, with particular reference to the possible need for an international force in the implementation of the recommendations of the General Assembly. The Commission stated that it would submit to the Security Council a special report on this subject.

2. The Special Report (S/676)* was presented to the Security Council on 16 February. In the conclusion to this report the Commission set forth the following views, which it now reaffirms.

“The Commission submits this report with a profound appreciation of its duty to the United Nations. The sole motivation of the Commission is to obtain from the Security Council that effective assistance without which, it is firmly convinced, it cannot discharge the great responsibilities entrusted to it by the General Assembly.”

3. The Commission wishes to lay special stress on the security situation with regard to the City of Jerusalem.

According to official information from the Mandatory Power, security service in the City of Jerusalem is now provided by 900 British and 350 Palestinian police, supported by more than a brigade of British troops. Even with the support of strong military forces, instances of shooting, bombing and indiscriminate killing are daily occurrences in Jerusalem as in other parts of Palestine. According to the estimate of the Mandatory Power, a force of 1,000 non-Jewish, non-Arab personnel of special police in addition to local Arab and Jewish police is considered as a minimum to cope with the preservation of law and order in the area of the City after the termination of the Mandate.

In the opinion of the Commission such a force might be sufficient provided that there would be no attempt on either side to seize Jerusalem - a much coveted City - and that there were an agreement to respect the international character of the “City of Jerusalem” and let it live in peace.

In reply to a question put to it on 10 March 1948 by the permanent members of the Security Council regarding the minimum conditions which are prerequisite to the administration of the City of Jerusalem by the United Nations, the Commission made the following statement:

Jerusalem, as an enclave in hostile surroundings, would be doomed. In the present circumstances, the appointment by the Trusteeship Council of a Governor of Jerusalem, notwithstanding his authority to recruit outside Palestine the envisaged special police force “to assist in the maintenance of internal law and order and especially for the protection of the Holy Places”, would be utterly inadequate to ensure the safety of Jerusalem. Such police force would be able to control neither the communications of Jerusalem with the outer world, not its water and food supply, nor its fuel, power and electricity supply, which are outside the boundaries of the City and may be cut by hostile elements.

D. ADMINISTRATIVE PROBLEMS

1. Provisional Councils of Government

In pursuance of its decision, the Commission has continued preparatory work in this matter.

2. Armed Militias



The Mandatory Power advised the Commission that “generally speaking, none of these activities can be permitted in Palestine prior to the termination of the Mandate, although it is possible that some preliminary steps might be taken during the last fortnight of the Mandatory period”. The Mandatory Power also gave an unfavourable reply to the Commission’s enquiry as to whether it would be permitted to build up a store of arms and equipment under seal in Palestine, prior to the termination of the Mandate. It added that it had “no suggestions to make as to how security could best be maintained in the period between the termination of the Mandate and the formation of the militia”. The Commission advised the Mandatory Power that it regarded the position as unsatisfactory in the light of the clear intent of the Assembly’s resolution, and that it would communicate its conclusions to the Security Council. The Commission did so in its second Monthly Progress Report (S/695, page 13).

3. Police Forces

(a) Apart from the armed forces of the Mandatory Power, which are to be withdrawn from Palestine by 1 August 1948, the Government of Palestine has relied upon other security forces to maintain law and order in Palestine. The Commission has expressed a natural interest as to what would be the disposition of security forces and their armaments, and particularly the Palestine Police Force. In response to an inquiry of the Commission as to the disposition of the Palestine Police Force and its arms, equipment and stores, the Mandatory Power stated on 30 January 1948:


(b) The Commission entered into consultations with the Mandatory Power with a view to arranging that all the assets of the Palestine Police Force would be safely transferred to the Commission or to such bodies as the Commission would designate on the termination of the Mandate. The Mandatory Power advised the Commission on 27 February that all the arms, equipment, stores and depots “will be available to be taken over by the Commission with effect from 15 May, and the Government of Palestine are ready to discuss the procedures...with representatives of the Commission’s staff”. In view of the inability of the Commission to proceed to Palestine prior to 1 May 1948, and owing to the impossibility of making effective arrangements for safeguarding the arms, stores and equipment of the Police Force, the Commission has been unable to conclude any arrangements for taking over the assets of the Palestine Police Force. In the meantime, the Commission has endeavoured to obtain an inventory of those assets. It is a matter of concern to the Commission that these assets should not be merely abandoned or permitted to fall into the hands of irresponsible elements in Palestine.

4. Administrative Personnel of the Palestine Government

(a) The Commission considers it as a matter of prime importance that civil servants of the Palestine Government should continue in the government service of Palestine. There can be no continuity in administration without continuity in the personnel and machinery of administration, at least until arrangements can be made for an orderly and progressive transfer to the successor authorities.

With respect to the Arab employees of the Government of Palestine, who constitute some sixty-two per cent of the civil service, the Mandatory Power has advised that there was strong reason to believe that none of them would be prepared to serve the Commission. On the other hand, the Jewish Agency for Palestine has informed the Commission that 4,500 Jewish Government officials in Palestine are ready to co-operae with it.
5. Postal Administration (a) Since the Palestine Postal Administration was represented by the Government of the United Kingdom as a contracting party at the Universal Postal Union, the Mandatory Power had to notify the Union of its inability to assume responsibility for the maintenance of postal services in Palestine after the termination of the Mandate. The Mandatory Power has informed the Commission that it could not undertake responsibility for mail reaching Palestine after the following dates: parcel mail, after 15 March; letter mail sent by surface route, after 15 April; for parcel mail sent to Palestine in transit to countries beyond, after 15 April; and money order service with Palestine would be discontinued after 29 February.

6. Medical Services

(a) The Commission has taken several steps with a view to ensuring the maintenance of medical services in Palestine after the termination of the Mandate. Arrangements had been made by the Mandatory Power for the International Red Cross to afford such assistance as was possible. As the International Red Cross had no funds at its disposal for this purpose, the Government of Palestine proposed to make available to the International Res Cross a contribution from Palestine Government funds. The Commission approved the suggestion that P 30,000 should be made available from Palestine funds to the International Red Cross Committee to cover six months expenditure from 1 April 1948.

7. Public Information Services and Facilities

The Commission attaches great importance to the continuation of the public information services and facilities in Palestine for the effective functioning of the administration and the fulfilment of the Commission’s task. Consequently, it has held consultations with the Mandatory Power concerning the amount and nature of the existing facilities of the public information services, the personnel employed, and the plans of the Administration for ensuring the continuation of the machinery of such services.

8. Prisoners and Detainees, and Internees in Cyprus

(a) The Commission has engaged in negotiations with the Mandatory Power with respect to the future of prisoners in Palestine, the internees now held in Cyprus, and detainees confined in Palestine and in Kenya.

9. Municipalities and Local Councils

(a) During the last few months, the Palestine Administration has been decentralizing services and devolving greater responsibility on local authorities, in order that at least in some degree these services may be continued after the termination of the Mandate.

10. Requisitioned Property

With the exception of the residence of the High Commissioner, the Government of Palestine has no property of its own either for offices or for housing accommodations. It has found it necessary, therefore, to requisition a considerable amount of property and, in a large number of cases, had also rented property under lease. It approached the Commission on matters relating to the liabilities arising out of the dilapidation of such property.

11. Enemy Property in Palestine

The United Kingdom Government considers itself responsible, under the provisions of Article 6 of Part I of the Final Act of the Paris Conference on Reparations, for the administration and the disposal of German assets in Palestine. The final sum likely to be accountable for reparations in respect of German enemy assets in Palestine was about four million pounds, a large amount of this being fixed assets.

The Commission has considered it important to reserve its position on the matter pending further consultations with the Mandatory Power.

12. Palestine Museum in Jerusalem

The Mandatory Power has informed the Commission that the Government of Palestine has been in consultation with the President of the Rockefeller Foundation as to the future of the Palestine Museum and that it was prepared to introduce legislation providing for a Board of Trustees to administer the Museum and the Fund. The Commission has accepted the proposals of the Government of Palestine, on the understanding that no financial responsibility on the part of the Commission would be involved.

V. THE WORK OF THE COMMISSION
PART TWO: ECONOMIC, FINANCIAL AND FISCAL PROBLEMS

A. STEPS TOWARD THE ECONOMIC UNION

1. The major economic tasks of the Commission, as set out in the Plan of Partition, are the organization and establishment of the Economic Union and the Joint Economic Board (I, D of the Plan) and the determination of the assets of the Palestine Administration and their distribution between the two States and the City of Jerusalem (Part I, E of the Plan). Also, by implication, the Commission has the responsibility for making arrangements to maintain continuity in the essential economic services of Palestine.

The objectives of the Economic Union are:

(a) A customs union;

(b) A joint currency system providing for a single foreign exchange rate;

2. Part I, D, 1 also provides that the Provisional Councils of Government of each State should enter into an Undertaking with respect to Economic Union and Transit. This Undertaking is to be drafted by the Commission “utilising to the greatest possible extent the advice and co-operation of representative organizations and bodies from each of the proposed States.” It is further provided that “if by 1 April 1948 the Provisional Councils of Government have not entered into the Undertaking, the Undertaking shall be put into force by the Commission.” Further, in order to establish the Economic Union, Part I, B, 11 of the Plan provides that: “The Commission shall appoint a preparatory economic commission of three members to make whatever arrangements are possible for economic co-operation, with a view to establishing, as soon as practicable, the Economic Union and the Joint Economic Board, as provided in section D below.”

3. It will be clear that the effective establishment of the Economic Union requires a certain minimum of co-operation between the parties to it. That such co-operation has been lacking on the part of the Arabs has already been explained elsewhere in this report. On the other hand, the representatives of the Jewish community, from the beginning, have been ready to co-operate in the establishment of the Economic Union. Since, however, it has been the policy of the Mandatory Power to retain undivided authority in Palestine until the termination of the Mandate, there has never been any possibility that the Commission could put into force the Undertaking with respect to Economic Union and Transit on 1 April (Part I, D, 1 of the Plan). There is, therefore, in any case, quite independently of Arab non-co-operation, no possibility of establishing any machinery of the Economic Union before the termination of the Mandate.

4. On 19 January 1948, the Commission agreed that the Preparatory Economic Commission should consist of two members from States nor represented on the Palestine Commission and one member of the Secretariat. Accordingly, Mr. Beedman, senior economic adviser to the Commission, was appointed as the Secretariat member. Ten other highly qualified economists have been considered by the Commission, but none of these has been able to accept appointment. The failure to establish the Preparatory Economic Commission has increased the work both of the Commission and of the Secretariat, but it has not, in itself, been a major influence in retarding the establishment of the Economic Union in relation to the time-table of the resolution, since the realization of this time-table was made impossible by the facts already mentioned.

B. PALESTINE GOVERNMENT ASSETS

1. As regards the assets of the Palestine Administration, aging owing to the policy of the Mandatory Power to retain undivided authority until the termination of the Mandate, it has not yet been possible to make any distribution of assets between the successor authorities in Palestine. Moreover, before this can be done an inventory of such assets must be provided by the Mandatory Power, and it cannot be satisfactorily completed before the termination of the Mandate. Preliminary consultations with the Mandatory Power have taken place in pursuance of Part I, E, 2 of the Plan.

2. The Mandatory Power has informed the Commission that the budgetary operations of the Palestine Administration up to 15 May will result in a deficit estimated by the Mandatory Power to exceed P 7 million, and that thus the Treasury surplus will have been converted into a Treasury deficit. Although the Commission has not been consulted by the Mandatory Power regarding the liabilities which should be charged against Palestine revenues, the Commission is not satisfied that certain extraordinary items - such as the cost of the maintenance of Jewish illegal immigrant camps - should be charged against the revenues of the Palestine Administration. However, as there will exist a considerable amount of unpaid obligations on the date of the termination of the Mandate, the ultimate settlement of these liabilities remains to be discussed with the Mandatory Power.

3. The Commission was informed by the Mandatory Power on 20 March 1948, that the unspent balance of over P 3 million remaining from three issues of bonds made in Palestine since 1944 was frozen and invested in British Government securities pending a general financial settlement, and that it was decided by the Mandatory Power not to make any further disbursements from this total prior to the termination of the Mandate. Two exceptions to this have been made: a loan of P 353,387 has been made to the Tel-Aviv Municipality for the purchase of certain lands, and a loan of P750,000 to the Haifa Municipality to enable it to take over an area known as the Haifa Harbour Estates, which is Government domain. These transactions were brought to the notice of the Commission only after they had been arranged.

The Commission was informed by the Mandatory Power, in a letter dated 22 March, of an amendment to the Iraq Petroleum Company’s pipeline concession by which “His Majesty’s Government have authorized the High Commissioner to grant the Company pipeline facilities ... in return for an annual payment of P 45,000.” In this letter the Mandatory Power recognizes that this concession, having been granted after the approval of the Plan by the General Assembly, does not come under paragraph 3 (d) of Chapter 3 of the Plan, which safeguards the rights of concessionaires in respect of concessions granted prior to the approval of the Plan by the General Assembly. The Commission has reserved its position both as regards the failure of the Mandatory Power to discuss the matter with the Commission and the attitude of the Commission to the concession when it assumes authority in Palestine. Although the United Kingdom Government has authorized the High Commissioner in Palestine to grant the concession, the Commission has not been informed that the concession has been granted.

C. GENERAL CONTINUITY OF ESSENTIAL ECONOMIC SERVICES

One consequence of the policy of the Mandatory Power not to relinquish any authority in Palestine before the date on which it terminates the Mandate is to give greater urgency to the problem of maintaining continuity in the essential economic services. The Commission has attempted, and is still attempting, to make such arrangements as the circumstances permit to prevent a breakdown of economic life, with consequent hardship and suffering for the people of Palestine.

D. FOOD SUPPLY

1. The most urgent of these problems is the maintenance of an adequate food supply. Palestine normally imports a great part of its essential food, including about half of its consumption of cereals, all its sugar, more than half its oils and fats and more than half its meat, all of which are products in short supply. Cereals, oils and fats, fertilizers and certain other products of lesser importance are subject to allocation by the International Emergency Food Council. Allocations for Palestine are at present obtained by the Mandatory Power as part of allocations to the entire British Middle East area. Other products, such as sugar and some dairy produce, have latterly been supplies to Palestine out of British Ministry of Food supplies. Since the early days of the War, many of these products have been purchased in bulk by the Palestine Administration, through a Government Trading Account, and distributed through established traders. Some of these commodities, especially bread cereals, have been sold to consumers at less than cost price, the loss on the Government Trading Account being provided out of the general revenues of the Palestine Administration. Since the decision to terminate the Mandate on 15 May, the Mandatory Power has declared that it will complete its programme of supplies for Palestine up to 15 May but that it will make no purchases of supplies to meet consumption needs beyond that date. The view of the Commission is that the Mandatory Power should continue normal procurement until 15 May. This would provide for those supplies which, though arriving after 15 May, would normally be shipped before that date. The Mandatory Power has not accepted this view, although its own policy of maintaining undivided authority until 15 May makes it difficult, if not impossible, for the Commission to make satisfactory arrangements for food supplies to Palestine before its own assumption of authority after the termination of the Mandate.

On the suggestion of the Mandatory Power, made in a letter dated 3 February 1948, the Commission sent its Senior Economic Adviser and food expert to London on 14 February to consult with representatives of the British Ministry of Food concerning the food situation in Palestine. Subsequently, the Commission proposed to the Mandatory Power, in letters dated 5 and 11 March 1948, that the Mandatory Power purchase immediately through the Palestine Government Trading Account, a sufficient quantity of bread cereals to complete the allocations fixed by the International Emergency Food Council to 30 June, together with 5,000 tons of sugar. In respect of meat and oils and fats, the Commission requested the Mandatory Power to grant import licences immediately for the purchase of frozen and canned meat to complete, up to 1 October at least, the proportionate amount of the 1948 allocations, and 2,500 tons of liquid edible oil, 5,000 tons of coconut oil, and 5,000 tons of linseed oil.

2. On 18 March 1948, the Commission received a reply from the Mandatory Power to the effect that it would continue existing procurement of food supplies to meet requirements up to 15 May and that, for the period from 15 May to 30 June, it would be prepared to arrange for the procurement on an agency basis of those supplies which it at present undertakes. However, the Mandatory Power declared that the Government of Palestine was unable to advance money to finance these operations, and that its action on an agency basis would be conditional on the Commission assuming the financial obligations. Further, the Mandatory Power stated that “whilst noting the Commission’s objections to private importation as likely to weaken central control of supplies and distribution, His Majesty’s Government have, in the urgent circumstances now existing, authorized the High Commissioner for Palestine to allow private importation at his discretion forthwith”.

3. On 25 March, the Commission again requested the Mandatory Power to continue procurement until 15 May, on the understanding that the Commission accepted the view that financial obligations arising from food supplies provided for Palestine before the termination of the Mandate, but not arriving in Palestine until after that date, would be the responsibility of the Commission within the scope of the authority entrusted to it by the resolution of the General Assembly. The Commission also proposed to undertake to arrange for the reimbursement of the United Kingdom Government at an early date out of the future revenues of Palestine for expenditure incurred in securing supplies for the period 15 May to 30 June. Alternatively, the Commission proposed to guarantee reimbursement, either from the future net income of the Palestine Currency Board or from the surplus assets of the Currency Board. The Commission pointed out the disadvantages which were entailed in a departure from the present system of bulk purchases, especially since the Treasury Order of 22 February 1948, blocking Palestinian sterling balances, has added foreign exchange difficulties to other uncertainties of private procurement.

On 5 April the Mandatory Power replied, restating its former position that it could only undertake procurement on an agency basis “if they are put in funds at the time that payment is required by the suppliers”. It was again stated that the Government of Palestine is already in deficit and that the United Kingdom Government has been obliged to advance a substantial sum to meet outstanding commitments. It is further stated that “His Majesty’s Government cannot feel confident that the Commission will now be in a position to implement within a reasonable time a guarantee to reimburse His Majesty’s Government out of the future revenues of Palestine”. As regards the proposal of the Commission to guarantee repayment to the United Kingdom Government out of either the revenues or the surplus assets of the Currency Board, the United Kingdom Government states its opinion, which the Commission cannot accept, that there is no successor authority to the Palestine Currency Board until the Joint Economic Board is established. The letter further points out that it is essential that shipping arrangements should be made within the next week or ten days, otherwise on 15 May Palestine’s stock of cereals will not exceed two weeks’ supply, except insofar as the position may be covered by private importers. The letter finally suggests that “the Commission might wish to consider approaching the Secretary-General [of the United Nations] with a view to funds being provided for this purpose”.

4. The Commission, therefore, is faced with the task of making immediate emergency arrangements for supplies, especially of cereals, if starvation is to be prevented from developing in Palestine within a short time after 15 May. The difficulty is financial, since, given satisfactory financial guarantee, the United Kingdom Government is prepared to undertake procurement on an agency basis. The Mandatory Power has, however, suggested the alternative of placing responsibility for all aspects of procurement upon private importers by the grant of import licences. Among the disadvantages of this method of procurement are the difficulties which private traders will experience in obtaining supplies of commodities in which they have not been dealing during recent years. A further difficulty is created for private importers by the British Treasury Order of 22 February, blocking Palestinian sterling balances and excluding Palestine from the sterling area.

5. The Commission has also had discussions with representatives of the Jewish Agency regarding the possibility of financial guarantees being provided by Jewish interests. Some steps are being taken by private interests, independently of the Commission, to make financial provision for certain essential food imports. These, however, would certainly not make provision for the Arab area, and possibly not for the Arab population of the Jewish area. Though the larger proportion of imported food is normally consumed by the Jewish population of Palestine, there is nevertheless a considerable section of the Arab population which is partially dependent upon imported supplies. In the view of the Commission, the most satisfactory solution of the problem lies in the maintenance of the present machinery of procurement by bulk Government purchases, and this would only have been possible if the Commission had had the financial means and the co-operation of the Mandatory Power.

6. A further aspect of the food problem on which immediate action is necessary is the representation of Palestine before the International Emergency Food Council (IEFC). After the termination of the Mandate, the Mandatory Power has no further responsibility to secure for Palestine allocations from the International Emergency Food Council. For example, existing allocations for cereals run only until 30 June 1948, and new allocations will be made within the next two or three weeks. In most cases allocations for Palestine have been made by the IEFC as part of the total allocations to the United Kingdom for British Middle East areas. The presentation of the Palestinian case requires detailed negotiations supported by statistical data. The Commission’s food expert has been studying those problems in consultation with officials of the British Ministry of Food, and the Commission is endeavouring to make an immediate arrangement with the United Kingdom Government for some form of joint presentation of Palestine’s case to the allocation committees of the IEFC.

7. The food situation in Palestine is highly precarious because of the very low stocks of essential food (not more than fifteen days in respect of bread cereals). There has been no serious overall shortage as yet, except in the case of meat, by far the larger proportion of which is normally supplied by imports of livestock from Middle East countries. This supply, especially to the Jewish population, has virtually ceased as a result of the Arab boycott, and the import of frozen and canned meat can only very partially offset this shortage. It is probable that shortly after 15 May a very serious food shortage will arise, owing to an interruption in the flow of imports. In order to maintain even the present low levels of stocks, an eight weeks’ supply needs to be flowing towards Palestine. The Commission takes a very serious view of the situation and is therefore making every endeavour to overcome the obstacles which it has encountered and to maintain essential food imports into Palestine.

E. STERLING BALANCES AND FOREIGN EXCHANGE PROBLEMS

1. When the Commission started its work as a result of the Assembly resolution of 29 November, Palestine was a full member of the sterling area. Palestinian sterling balances were freely available for conversion into sterling for use throughout the sterling area. Since the bulk of Palestine food imports and other imports came from the sterling area, or was obtained by the United Kingdom Government through preferential arrangements applying to the sterling area as a whole, Palestine did not then experience any specific foreign exchange difficulties. In fact, Palestine was in a favourable position in that it had considerable dollar accruals from gifts to Jewish funds and institutions. These gift dollars were credited to a separate account and earmarked for the import of capital goods from the United States, with the joint approval of the Palestine Administration and the Jewish Agency, for the benefit of the Jewish economy. Dollar earnings of Palestine through general exports were earmarked for the benefit of the Arab population. All dollars, however earned, passed through the sterling area dollar pool in London.

2. This position was completely changed by the Order made by the British Treasury on 22 February, previously referred to in this report. This Order excludes Palestine from the sterling area and blocks the accumulated sterling balances, except for 3 million which, together with current sterling accruals, continue to be freely available. Another 4 million sterling was provided as free working balances for Palestinian banks. These releases cover the period 22 February to 15 May. The Commission has been invited to enter into negotiations with the British Treasury regarding further releases to cover the period after 15 May. As for the period after 15 May, the Treasury Order indicated the intention of the United Kingdom Government to negotiate with the Commission.

This Order was made by the British Treasury without prior consultation with or even prior notification to the Commission. The unilateral nature of the announcement was pointed out by the Commission in its second Monthly Progress Report to the Security Council.

3. The Commission considers that an early negotiation of amounts to be released from Palestinian sterling balances is essential. Meanwhile, the Commission is faced with the situation that if the present releases from sterling balances and the future releases to be negotiated should prove inadequate, sterling may become a scarce currency for Palestine, and that, therefore, imports from the sterling area may become difficult to obtain. This fact increases the responsibility of the Commission to see not only that a sufficient amount of sterling is unblocked, but also that the released sterling is used to the best advantage of the Palestinian economy.

4. The blocking of sterling has also created a state of considerable uncertainty among Palestinian importers as to whether they will be able to utilize import licences granted to them. The Commission has repeatedly pointed out that this uncertainty will have adverse effects on the prospects of the policy pursued by the present Palestine Administration to devolve responsibility for food imports on private traders by the issue of import licences. The Commission has been informed that traders have found difficulty in obtaining bank finance to utilize their import licences. The existing difficulties may be illustrated by the fact that the normal period between the first submission of an application for an import licence and the arrival of the goods in the country is from four to six months, and that at the moment there is complete uncertainty in Palestine on the amount of sterling which will be available in four to six months’ time. In its negotiations with the British Treasury, the Commission hopes to obtain specified sums to be released covering the whole period between 15 May and 1 October, in order to minimize the disruption of trade inherent in the present uncertainties.

F. THE PALESTINE CURRENCY BOARD

1. The Plan of the General Assembly provided that the Economic Union of Palestine should have a common currency with a single rate of foreign exchange. It is a task of the Commission to give effect to this decision. In any event, however, the termination of the Mandate necessitates a decision regarding the future of the Palestine Currency Board.

2. At present Palestinian currency is backed by an equivalent amount of British securities and currency. These are held in London by the Palestine Currency Board, which is in control of Palestinian currency. The Currency Board consists entirely of United Kingdom Government representatives appointed by the Secretary of State for the Colonies. The Currency Board’s assets now exceed 50 million and represent over one-half of all Palestinian sterling balances. The existing assets of the Currency Board have been blocked by the British Treasury, but the current net income of the Currency Board (amounting to over 1 million a year) is available as free sterling and is not affected by the blocking order.

3. The Commission’s major concerns regarding Palestinian currency are:

As regards the first objective, the Mandatory Government, in negotiations with the Commission, has declared itself willing to render all technical assistance necessary in continuing to provide printing facilities and to hold sufficient supplies of currency ready for use as required by the Commission, subject to the general regulations of the Currency Board.

The Commission has accepted in principle an invitation by the United Kingdom Government to appoint an observer to attend the meetings of the Currency Board before 15 May, so as to keep itself informed of the current position of the Currency Board and of any major decisions made. At the same time, the Commission has fully reserved its position regarding the Currency Board after 15 May.

As for the second objective, the Commission takes the view that it becomes responsible for the control of Palestinian currency on 15 May and will thus assume control of the current income and assets of the Currency Board after that date. This does not exclude arrangements by agreement between the Commission and the United Kingdom Government to continue the Currency Board in its present form as part of a general settlement of the outstanding economic and financial issues. The Commission cannot accept the view expressed in the communication of the Government of the United Kingdom of 5 April, that “the disposal of Palestine Currency Board funds would be a matter on which the views of the successor currency authority should be obtained. Under the General Assembly’s Partition Plan, this was envisaged to be the Joint Economic Board, and until the future currency authority is set up, the disposal of any such funds must rest in abeyance”. The Commission considers the assets of the Currency Board as an essential part of the national capital of Palestine built up by export surpluses in the past, and it would be one of the duties of the successor authority to see that these assets are safeguarded.

G. FISCAL PROBLEMS

1. The conversion of the Treasury surplus into a considerable deficit has been mentioned previously in this report. The Commission has been kept informed by the United Kingdom Government and by its own Advance Party of the gradual deterioration of the financial position, but it has not been consulted on what claims should be met out of the current revenue of the country. Expenditure, as budgeted by the present Palestine Administration, exceeds revenue by P 2.8 million for the period April 1947 to January 1948, inclusive. Of this deficit, almost 2 million in due to the maintenance of Jewish illegal immigrants in Cyprus, already charged to the current budget. The Commission has not agreed - nor has it been asked to do so - to make these claims a charge on Palestinian revenue. Considerable other extraordinary claims are pending, as, for instance, in respect of abolition benefits to civil servants. Some of these special claims which may have to be contested by the Commission will only become payable after 15 May. At no stage was the Commission in a position to prevent such disposal of the existing Treasury surplus and the winding up of the Mandatory fiscal administration with a heavy unsettled deficit.

2. As a result of this conversion of the Treasury surplus into a deficit, the Commission finds itself faced with the following situation:

3. The Commission has repeatedly considered and discussed the budgetary situation. It expressed the opinion that the disappearance of the existing Treasury surplus is almost entirely due to special and extraordinary claims which the Commission feels should not take precedence over the securing of essential food supplies and the provision of essential working funds for the Commission on 15 May. The Commission has left the Mandatory Power in no doubt, either on this point or with regard to the fact that it should have been consulted in accordance with Part I, E, 2 of the resolution.

4. The ordinary revenue of Palestine after 15 May will depend in a high degree on customs duties on imports. These imports will mainly come in through the port of Haifa. Hence, the fiscal position of the Commission will depend partly on the manner in which the control of the Haifa dock area will be shared with the evacuating British troops between 15 May and 1 August. This is one of the matters which has to be settled with the Mandatory Power.

H. TRANSPORT AND COMMUNICATIONS

1. The resolution of the General Assembly provides for the operation in the common interest, on a non-discriminatory basis, of railways, inter-state highways, postal, telephone and telegraphic services, and ports and airports involved in international trade and commerce. These services are to be administered by the Joint Economic Board as part of the Economic Union. The Commission has been faced, therefore, with the task of making arrangements to maintain these serviced on a unified basis.

2. The task of the Commission in this respect, under existing circumstances, has been extremely difficult as a result of the policy of the Mandatory Power and the present disorders in Palestine. The fact that British troops in process of evacuation will be in occupation of certain areas in Palestine after the termination of the Mandate complicates the situation in regard particularly to railways and the port of Haifa. The maintenance of transport communications on a unified basis for the whole of Palestine is vital for the life of great numbers of the population. Thus, main road communications from the coast to Jerusalem must be kept open to safeguard large sections of the population of Jerusalem from starvation.

These services must either be operated on a unified basis or they will break down entirely; their maintenance depends upon freedom from disturbances.

3. In the circumstances, the Commission has had to confine itself to a general study of the economic and administrative problems entailed in the maintenance of these services after the transfer of authority.
VI. CONCLUSIONS

A. REVIEW OF THE FACTS WHICH HAVE PREVENTED THE IMPLEMENTATION OF
THE ASSEMBLY’S RESOLUTION


1. The Commission on 9 January 1948, took up its task of implementing the General Assembly’s resolution of 29 November 1947, which had been supported by thirty-three Members of the United Nations.

The Commission appreciates the able assistance rendered to it by the Secretary-General and his staff, who have extended full co-operation to the Commission in carrying out the Assembly’s decision.

2. The Jewish Agency for Palestine co-operated with the Commission in its task of implementing the Assembly’s resolution. The Governments of the Arab States and the Arab Higher Committee not only withheld their co-operation from the Commission, but actively opposed the Assembly’s resolution. As the Commission reported to the Security Council in its first Special Report (S/676) on 16 February 1948, “Powerful Arab interests, both inside and outside Palestine, are defying the resolution of the General Assembly and are engaged in a deliberate effort to alter by force the settlement envisaged therein”. Armed Arab bands from neighboring Arab States have infiltrated into the territory of Palestine and together with local Arab forces are defeating the purposes of the resolution by acts of violence. The Jews, on the other hand, are determined to ensure the establishment of the Jewish State, as envisaged by the resolution. The resulting conditions of insecurity in Palestine have made it impossible for the Commission to implement the Assembly’s resolution without the assistance of adequate armed forces.S

3. The policy of the Mandatory Power, and particularly its refusal to take any measure which might be construed as involving it in the implementation of the Assembly’s resolution, has had the following consequences:

4. In its first two reports to the Security Council, the Commission foresaw the prospect of a security vacuum in Palestine immediately following the termination of the Mandate. The Commission also stated that it was confronted with a deliberate effort to alter by force the settlement envisaged in the resolution of the General Assembly. The Commission accordingly had decided “to refer to the Security Council the problem of providing that armed assistance which alone would enable the Commission to discharge its responsibilities on the termination of the Mandate.” On 15 March 1948, in its second Monthly Progress Report to the Security Council (S/695), the Commission reported the impossibility of implementing, within the prescribed time-limit, the provision of the Plan of the General Assembly concerning the Provisional Councils of Government, and the impossibility of taking preparatory steps for the formation of armed militias. It pointed out that the policy of the Mandatory Power together with the steady deterioration of conditions in Palestine left little hope for the achievement of continuity in administrative services and for an orderly transfer of authority to the Commission. The Commission also state that “unless security is restored in Palestine, implementation of the resolution of the General Assembly will not be possible.” The Commission has received no guidance or instructions from the Security Council, and no armed assistance has been made available to it.

5. The Commission, therefore, has the duty to report to the General Assembly that the armed hostility of both Palestinian and non-Palestinian Arab elements, the lack of co-operation from the Mandatory Power, the disintegrating security situation in Palestine, and the fact that the Security Council did not furnish the Commission with the necessary armed assistance, are the factors which have made it impossible for the Commission to implement the Assembly’s resolution.

B. REVIEW OF THE PROBLEMS WHICH REQUIRE AN URGENT SOLUTION

1. Irrespective of the ultimate decision of the General Assembly on the future government of Palestine, there are a number of urgent matters which should be dealt with in order to preserve the greatest possible measure of order and essential services in Palestine. Among the matters requiring immediate attention are the following:

(a) Security

2. With respect to the food situation in Palestine, the Commission has been advised by the Mandatory Power that, unless immediate provision is made for the further import of food supplies, on 15 May Palestine’s stock of cereals will not exceed two weeks’supply. The Mandatory Power has stated that the Government of Palestine cannot advance money for the procurement of further supplies as it has no monies available for this purpose, that the United kingdom Government is not prepared to advance the money, and that it has no confidence that the Commission would be able to implement within a reasonable time a guarantee to reimburse it out of the future revenues of Palestine. The United Kingdom Government is prepared to undertake procurement of food supplies for the period 15 May to 30 June on an agency basis only, provided they are furnished with funds to the amount of one to one-and-a-half million pounds sterling. In view of the urgency of this matter, the Commission is presenting a special report on the subject to the Security Council with a request for its guidance, in accordance with PartI, B, 2 of the Plan.

3. With respect to the City of Jerusalem, the Commission emphasizes the sacred character of this Holy City of Christianity, Islam and Judaism. The danger to the City and its Holy Places of violence and battle between hostile communities, and the possible widespread repercussions resulting therefrom, is obvious. The Commission calls to the attention of the Assembly the extreme urgency of the matter referred to in paragraph VI, D, 3(e) of this report, and reports that the question of securing the services of the Jerusalem Police Force following the termination of the Mandate is still the subject of discussions with the Mandatory Power and with the Secretary-General. The Commission feels bound to point out, however, that a successful solution of this question will not provide for the security of Jerusalem in the case of civil war in Palestine. It will be of assistance to the internal protection of life and property in the City.

4. With respect to the Palestine Police Force, the Mandatory Power has advised the Commission that the force will be dissolved on 15 May and that its arms, stores, equipment and depots will be left to be taken over by such persons as the Commission may designate. A considerable number of police or other personnel will be required to take over and safeguard the large stocks of armaments that are the property of the Palestine Police Force. Otherwise there is grave danger that these stocks may be abandoned or may fall into the hands of irresponsible elements in Palestine.

5. With respect to matters of administration, the Mandatory Power has advised the Commission that the contracts of all employees of the Government of Palestine will be terminated on 15 May and that the Commission would be free to re-engage any employees who might wish to continue in government service in Palestine. Immediate steps clearly should be taken to preserve as much as possible of the personnel and machinery of administration and to safeguard the files and physical property of the various departments of Government. In the case of transportation, communications, health, fiscal matters and other essential services, it will be necessary to re-employ or recruit a large staff, in order to prevent a complete break-down in administration in Palestine after 15 May.

6. The Commission has been prevented from concluding arrangements, even in respect of such vital matters as food supplies, the creation of a non-Palestinian police force for Jerusalem, the organization of an emergency police force to take over the stores and armaments of the Palestine Police Force, and the recruitment of personnel to carry on the functions of administration in Palestine, by the fact that it has no funds available for such purposes. Even though such expenditures would be re-imbursable out of future revenues of Palestine, the Commission would require a substantial working capital funds out of which immediate necessary expenditures could be met.

7. The steadily deteriorating situation in Palestine leads to the inescapable conclusion that, in the absence of forces adequate to restore and maintain law and order in Palestine following the termination of the Mandate, there will be administrative chaos, starvation, widespread strife, violence and bloodshed in Palestine, including Jerusalem. These calamitous results for the people of Palestine will be intensified unless specific arrangements are made regarding the urgent matters outlined above well in advance of 15 May 1948.

(Signed) ________________________________________
Karel Lisicky (Czechoslovakia), CHAIRMAN

____________________________________________
Raul Diez de Medina (Bolivia), VICE CHAIRMAN

____________________________________________
Per Federspiel (Denmark)

____________________________________________
Eduardo Morgan (Panama)

____________________________________________
Vicente J. Francisco (Philippines)


10 April 1848
Lake Success, New York

______________________________

*The following list of casualties for the period 30 November 1947 to 3 April 1948, replaces the casualty list presented in Part II, paragraph 5 of the Special Report.


Nationality
Killed
Wounded
Total
BritishPolice
25
68
Soldiers
88
235
Civilians
8
6
----
----
Total
121
309
430
ArabsPolice
19
65
Soldiers
4
12
Civilians
936
1941
Total
959
2018
2977
----
----
JewsPolice
35
73
Civilians
840
1785
----
----
Total
875
1858
2733
OthersCivilians
22
25
47
====
====
=====
TOTAL CASUALTIES
1977
4210
6187



specsess2.48


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